Negotiations For Financing New Unit Of CET Bucharest South

Alina Toma Vereha

Electrocentrale - Bucharest (ELCEN) and Unit Investment NV & SOMOGIN SAM have set up a joint venture to build a highly efficient co-generation unit of the electro-thermal power plant CET Bucharest South and are in an advanced phase of negotiations with banks to complement existing financing.

"A club loan of 100 million EUR is being discussed. The new unit will have a capacity of 100 MW and 100 gcal. and a fuel efficiency rate of 82%. The investment will stand at approximately 130-140 million EUR," Irina Duica, Commercial Manager of ELCEN, told BURSA. She added that the joint venture set up to implement the project was called Uniel Energy Investment SA and was controlled by Unit Investment NV with 75%. SOMOGIN SAM holds 5%, while ELCEN has 20%. Approximately 30% of the funds required for the new co-generation unit will be provided by investors and the rest will come from a club loan. According to Duica, construction works are planned to start in February 2010 and finish in 24 months.

Another joint venture has been set up to build a new unit of the CET Titan. The investment will materialize in a new co-generation unit with a capacity of 14 MW and 18.6 gcal. per hour. The feasibility study made by ELCEN points to an estimated investment of 12.5 million EUR. The project management have started the selection of a general contractor through a public tender. Construction works are set to begin in approximately 6 months and will last 9 months. Irina Duica told BURSA that the joint venture was set up by Romelectro (30%), ISPE (30%), Equest (30%) and ELCEN (10%).

Similar joint ventures are being set up for CET Progresu in Bucharest and Fantanele in Magurele. However, the formalities are in an incipient phase. The two projects are currently in a phase of negotiations on the memoranda of understanding with the investor - a consortium formed by Wienstrom and Unit Investment NV.